Market-Linked Certificates of Deposit Market participationThe security of FDIC insurance*

Market-LinkedCertificates of Deposit (CDs)

Introduction

Over the past two decades, the marketplace for structured investments has grown significantly as investors ranging from young families to retirees have increasingly looked to these investments to help address wealth management objectives such as pursuing growth opportunities, generating income, and protecting principal.

Structured investments can take many different forms – registered notes and CDs to name a few. A very common method in which structured investments are issued is in the form of principal protected Market-Linked Certificates of Deposit (CDs).

Market-Linked CDs offer investors the potential to earn enhanced returns compared to those available with traditional deposit products.

Benefits and features

All of HSBC’s Market-Linked CDs are issued by HSBC Bank USA, National Association. In both rising and falling markets, these Market-Linked CDs are 100% principal protected, subject to issuers ability to pay, when held to maturity. In addition, the CDs are FDIC-insured up to the statutory limits*, but are subject to the credit risk of the issuer.

HSBC Market-Linked CDs can offer clients access to a wide range of markets such as US and international equities, commodities, and foreign exchange** by linking the returns on these CDs to the performance of these asset classes.

Equity indices and other reference assets

S&P 500® Commodity indices

NASDAQ 100® Precious metals

Dow Jones Industrial Average® Foreign currencies

Nikkei 225® (Japan) Interest rate benchmarks

DJ EuroStoxx 50® (Eurozone) Equities

Hang Seng China Enterprise (China) Exchange traded funds (ETFs)

An important tool in helping investors address the question “How do I try to grow my money without losing it?”

Financial objectives

Investor profile

There is no typical client when it comes to Market-Linked CDs. Designed for buy and hold strategies, the investor profile is broad, including retirees, baby boomers and families saving for college expenses.

Investors may be attracted by Market-Linked CDs’ ability to provide:

• 100% principal protection when held to maturity regardless of the performance of the reference asset, subject to the issuer’s credit risk

• The potential for enhanced returns compared to those available with traditional bank deposit products

• Focused exposure to a specific financial view

• Investment horizons of one to seven years

Tools for shaping client portfolios

Market-Linked CDs may have broad applications in a well-balanced portfolio and have become a tool that individuals and their financial advisors should consider to meet certain financial objectives. These CDs can be used as a complement to existing assets in a portfolio or as a way to employ a tactical or strategic view.

Market-Linked CDs can also provide an efficient means to attain the true benefits of portfolio diversification, allowing investors to conveniently invest in alternative asset classes that may be difficult to invest in directly.

No two clients or investment objectives are the same, which is why HSBC continuously seeks to develop innovative investment products to provide clients with financial strategies to help balance risk and reward.

Risk considerations

Market-Linked CDs are linked to the performance of specific underlying assets and are not equivalent to investing directly in that asset. It is important to note that Market-Linked CDs may not always reflect the actual performance of the underlying assets and have different risks than traditional CDs. For example, a Market-Linked CD may have features such as a cap or averaging, which could result in the performance of the CD differing from a direct investment in the underlying index or reference asset.

There is currently no established secondary trading market for Market-Linked CDs. In the event that clients are able to redeem Market-Linked CDs prior to maturity, the CDs may redeem at less than the original amount due to fluctuations in the underlying assets and other market factors.

In all instances, like other investments, Market-Linked CDs should be carefully evaluated with respect to financial objectives, suitability, duration, calculation methods, tax considerations, and other risk factors. In addition, under US tax rules, investors may be subject to US taxes on interest income that have not been paid during the tax year. Investors should consult their own tax advisors prior to investment.

For any Market-Linked CD, please read the disclosure materials provided by your registered financial representative carefully before investing.

About HSBC

International banking reach

The CDs are issued by HSBC Bank USA, NA, which is part of the HSBC Group, one of the largest banking and financial services organizations in the world, with a network of over 6,600 offices in 81 countries and territories worldwide.

Financial strength and security

• HSBC Bank USA, NA – USD187 billion in assets (as of December 2012)

• HSBC Bank USA, NA credit ratings are as follows: (as of December 2012)*** – A1 by Moody’s – AA- by S&P – AA- by Fitch

• FDIC Insurance: This deposit qualifies for FDIC coverage generally up to the statutory limits

Recognized Industry leader

• In the industry’s benchmark survey of U.S. structured products distributors conducted by Greenwich Associates, HSBC maintained its position as the leading provider of structured products to U.S. retail clients for the 4th consecutive year! – #1 in Overall Market Penetration – #1 in Overall Service Quality

For each year, Greenwich Associates conducted telephone interviews in the United States with distributors of retail structured products to better understand product demand, distributor preferences and the competitive landscape. The findings reported reflect solely the views reported to Greenwich Associates by the research participants. They do not represent opinions or endorsements by Greenwich Associates or its staff. Interviewees may have be asked about their use of and demand for financial products and services and about investment practices in relevant financial markets. Greenwich Associates compiled the data received, conducted statistical analysis and reviews for presentation purposes in order to produce the final results.

*FDIC Insurance: A Market-Linked CD represents a bank deposit obligation and is FDIC insured together with all other deposits you may have with the issuing bank, up to USD250,000 per depositor. Any funds deposited with the issuing bank (including other CDs issued by such bank) in excess of these limits will not be eligible for FDIC insurance, so you should consider and inform your financial advisor if you have other deposits at the issuing bank. For more detailed information regarding FDIC insurance coverage, you may contact the FDIC Call Center at (877) 275-3342 or refer to the FDIC public website at www.fdic.gov, where you can obtain a copy of the FDIC’s brochure, Your Insured Deposits, FDIC’s Guide to Deposit Insurance Coverage. Products and services are offered by HSBC Bank USA, NA, member FDIC.

**Depending on the underlying asset to which the Market-Linked CD is linked, there may be certain risks to consider. For information on a particular Market-Linked CD, see the relevant offering documents for a full discussion of risks and considerations related to the underlying asset(s) of such CD.

***The credit ratings pertain only to the creditworthiness of HSBC Bank USA, NA and are not indicative of the performance of the CDs nor are any third party awards received by HSBC Bank USA NA.

Market-Linked Certificates of Deposit are provided by:

•Registered Representatives of HSBC Securities (USA) Inc, a member NYSE/FINRA/SIPC, a registered Futures Commission Merchant, a wholly-owned subsidiary of HSBC Markets (USA) Inc and an indirectly wholly-owned subsidiary of HSBC Holdings plc

•Distributors not affiliated with HSBC Securities (USA) Inc, HSBC Markets (USA) Inc or HSBC Holdings plc

Market-Linked CD Products are: bank deposits; obligations of the issuing bank; FDIC insured within applicable limits; not a liquid investment; and are designed to be held to maturity. Market-Linked CDs are subject to investment risk and any early repayment could result in a loss of principal investment.

This is not a recommendation, offer or solicitation to purchase or sell any CD, security, commodity, currency or other instrument. The information herein does not consider specific objectives, circumstances or needs of individual recipients. Recipients of this information should seek financial advice regarding the appropriateness of investing in any CD, security, commodity, currency or derivative instrument or strategy contained herein.

Issued by HSBC Bank USA, NA.© 2013 HSBC Bank USA, NA. All rights reserved.

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